It takes calamity to rebalance: Sabanci CEO
In a recent meeting with economics journalist, Sabanci Holding CEO Mehmet Gocmen took the opportunity to acknowledge that the Turkish economy faces some trying times ahead. “The current global environment is increasing the cost of resources for Turkey,” he said. “The steady flow of election cycles in this country also affect the economy. Consequently, a balanced course cannot be achieved in growth.”
Nonetheless, Gocmen is still positive about 2019: “We know how we can manage the crisis in Turkey. The public in particular knows what to do and is capable of handling the difficult tasks ahead,” he said. “However, for the first time, how the private sector will manage the crisis is important because the weight of problems is in the private sector. The public and the private sectors have to write a new story together and take steps for growth to gain momentum again.”
He added: “The system may go out of order. This is possible everywhere. The important thing is the correction mechanism. If there is a control and correction mechanism, if the market mechanism is functioning properly, there is nothing to worry about. But we usually rebalance with earthquakes. We continue to do bad things assuming things are going well. Then we can only rebalance with an earthquake.” The problems banks face finding money, collection problems, resource shortages experienced by supply chains...They all affect each other. But perhaps the most frightening is the recession in investments. Gocmen looked at this issue from a different point of view in terms of the future: “Turkey needs to focus on high-tech, value-added products in the coming period. On the other hand, these investments cannot create more jobs. If the new balance will not be in construction - which seems not possible - establishing a balance between value-added products and employment is essential. It is also necessary to think about the sectors in which employment will be provided.” Gocmen outlined four main areas for this: Agriculture, tourism, industry and overseas contracting.
Investments in general are not very good but what about the Sabancı Group’s investment approach? Will they continue to invest or choose to wait a while? “If making investment was right for yesterday, it is even more essential for today,” Gocmen said. “Investments should continue non- stop. Investment is not just an investor’s decision; it is the decision of the climate.”
Gocmen also referred to the perspective of foreigners: “They first make the decision of whether Turkey is investible. Then, they look at sectors. Foreign investors look for long-term trust. Their concern is: ‘The regulations are fine, but what if they change?” he said.
“There is no financial environment in the world that we cannot reach. Everyone is taking Turkey into account and no one can take away this potential from Turkey. If Turkey is embarking on a new road, this should be with longterm plans. Creating trust is a public-private task. All of our assets are in Turkey, 80 percent of our business is in the regulated sectors. Would this be possible if we did not have trust in Turkey?”